297.
The notion of “purposeful behavior” in the economic perspective suggests that
A.
people will tend to stick with a particular choice for a long period of time.
298.
When studying human behavior, economists assume rational self-interest. This means
that
D.
people have all the information they need to make a decision.
299.
When a state government chooses to build more roads, the resources used are no
longer available for public education programs. This dilemma illustrates the concept
of
A.
production expenses.
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300.
The opportunity cost of constructing a new public highway is the
C.
expected cost of constructing the new highway in a future year.
D.
value of shorter driving times and distances when the new highway is completed.
301.
The opportunity cost to a consumer who smokes cigarettes consists of the
D.
cost of complementary products such as lighters, ashtrays, and cigarette holders.
302.
The economic perspective focuses largely on marginal analysis, which means analyzing
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D. emotional and psychological facets of a given action.
303.
Which of the following is the best synonym for “marginal” in economics?
A. scarce
304.
Which of the following is another way of saying “marginal benefits of an action“?
A.
benefits given up, once the action is taken
305.
Mia wants to buy a book. The economic perspective suggests that Mia will buy the
book if
A.
she has enough money to pay for the marginal cost of the book.
306.
From an economic perspective, when a consumer decides to buy more life insurance,
the consumer has most likely concluded that the
A.
marginal cost of more insurance coverage is negative.
307.
From an economic perspective, when a student decides to go to the movies instead of
studying for a test, it indicates that in the student‘s thinking, the marginal
D.
cost of going to the movies is greater than the marginal cost of studying.
308.
From an economic perspective, when consumers leave a fast-food restaurant because
the lines to be served are too long, they have concluded that the
A. marginal cost of waiting is less than the marginal benefit of eating in that restaurant.
309.
What is the best economic explanation for why a person would drop out of college in
order to start a business?
A.
The person has a good idea for starting a business.
310.
What is a major opportunity cost of going to college on a full–time basis?
A.
the cost of transportation to college instead of to a job
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311.
The process of observing real-world behavior, developing hypotheses, testing them
against facts, then using the results to construct theories is called
A. opportunity cost estimation.
312.
An economic model is a purposeful simplification of reality, whose function includes
A.
understanding the full complexity of the real world.
313.
The economic principle that the “unemployment rate will tend to increase as the
economy moves into a recession” is an example of
A.
a normative statement.
B.
an assumption.
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314.
Economic models do not reflect the full complexity of reality, but instead are based on
D.
predictions.
315.
The role of an assumption in an economic theory is to
A.
add realism.
B.
prove the theory.
316.
Another way of saying “ceteris paribus” is
D.
because of this.
317.
The purpose of the ceteris paribus assumption used in economic analysis is to
A.
avoid making normative statements.
318.
Economists have difficulty applying the scientific method because
A.
economics has a short history.
319.
Which of the following illustrates a macroeconomic question?
A. Should the salaries of financial executives be regulated by the government?
320.
Which of the following exemplifies a microeconomic question?
A.
What is the current national rate of unemployment?
321.
Which question is an example of a macroeconomic question?
A.
What is the level of industrial concentration in the U.S. automobile industry?
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322.
Which question is an example of a microeconomic question?
A. What should the Federal government do to reduce the trade deficit with Japan?
323.
Which question is an illustration of a microeconomic question?
D.
Which economic system is better for consumers and firms?
324.
Which question is an illustration of a macroeconomic question?
A.
Is a corporation unresponsive to the demands of its customers?
B.
Is a consumer boycott an effective means of reducing a product’s price?
325.
The distinction between microeconomics and macroeconomics is
A.
that microeconomics examines the beach, while macroeconomics looks at the sand,
individual rocks, and shells, so to speak.
B.
so clear-cut that every topic can be readily labeled as either macro or micro.
326.
Matt observes that “there is a high correlation between educational attainment and
the level of income.” Jean concurs and adds that “high school graduates should all
proceed to college.”
A.
Both Matt‘s and Jean’s statements are positive.
B.
Both Matt‘s and Jean’s statements are normative.
327.
The statement in a newspaper that “consumer prices rose last month by 1 percent, and
if this trend continues, the annual rate of inflation will be 12 percent for the year“
is an
example of
A. a normative economic statement.
328.
Which of the following is a positive economic statement?
A.
Government must maintain the current level of defense spending to keep the nation safe.
329.
Which of the following is a normative economic statement?
330.
Which one of the following is a normative economic statement?
A. The unemployment rate fell for the fourth straight month, reflecting the effects from
stronger economic growth in the second quarter.
331.
The economizing problem for individuals is a consequence of the fact that
D.
normative economics is more important than positive economics.
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332.
Which of the following statements regarding people’s wants is true?
A.
Over time, people’s wants tend to be stable and constant.
333.
A budget line is a graph that shows the various combinations of two products that a
D.
nation can trade with another nation.
334.
Suppose that a consumer purchases just two goods, X and Y. The ratio of the price of
good X to the price of good Y is the
A.
intercept on the Y axis of the budget line.
B.
intercept on the X axis of the budget line.
335.
Suppose that a consumer purchases just two goods, X and Y. The Y-intercept of the
budget line in this case would indicate the
A.
maximum dollar amount of budget that the consumer has for good Y.
336.
Suppose that a consumer purchases just two goods, X and Y. The slope of the budget
line would indicate the
A. opportunity cost of good Y in terms of good X given up for each unit of Y.
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337.
A point or product-combination to the left of (or inside) a budget line
D.
costs more than a combination or point outside the budget line.
338.
Assume that a consumer spends a given budget on only two goods and that the prices of
the two goods are constant. The budget line in this case would
D.
be a curved bell-shaped graph.
339.
Assume that a consumer has a given budget or income of $12 and that she can buy
only two goods, apples or bananas. The price of an apple is $1.50 and the price of a
banana is $0.75. If the consumer spent all of her budget on just apples or just bananas, how
many apples or bananas maximum would she be able to buy?
A.
12 apples or 8 bananas
B.
8 apples or 12 bananas
340.
Assume that a consumer has a given budget or income of $12 and that she can buy
only two goods, apples or bananas. The price of an apple is $1.50 and the price of a
banana is $0.75. What is the slope of the budget line if the quantity of apples were
measured on the horizontal axis and bananas on the vertical axis?
A. -0.5
B. -0.8
341.
Assume that a consumer has a given budget or income of $12 and that she can buy
only two goods, apples or bananas. The price of an apple is $1.50 and the price of a
banana is $0.75. If the consumer decides to buy 4 apples, how many bananas can she also
buy with the remainder of her budget?
C.
6 bananas
D.
10 bananas
342.
Assume that a consumer has a given budget or income of $12 and that she can buy
only two goods, apples or bananas. The price of an apple is $1.50 and the price of a
banana is $0.75. For this consumer, the opportunity cost of buying one more apple is
A.
0.5 of a banana.
B.
0.8 of a banana.
343.
Assume that a consumer has a given budget or income of $12 and that she can buy
only two goods, apples or bananas. The price of an apple is $1.50 and the price of a
banana is $0.75. This means that, in order to buy two bananas, this consumer must forgo
D.
0.75 apple.
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344.
Assume that a consumer purchases only two products and there is a decrease in the
consumer’s income. The prices of the two products stay constant. The decrease in
income will result in
D.
an increase in the slope of the budget line.
345.
Assume that a consumer purchases only two products. Suppose that the
consumer‘s money income doubles, and the prices of the two products also double.
These
changes in income and prices will result in
A.
a shift of the budget line inward to the left.
346.
One major part of the opportunity costs of one’s decision to go to college after high
school graduation is the
A.
additional income that one can get if one had a college degree.
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347.
The economizing problem faced by society is essentially one of deciding how to make
the best use of
A.
limited economic resources to satisfy limited wants.
348.
Economists would classify all of the following as “land,” except
D.
iron ore deposits.
349.
The individual who brings together economic resources and assumes the risk of